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Working from home is not going anywhere. In fact, research shows that post-pandemic 42% of employees who worked strictly from a company-based location will not return to the office. Do you know how this will impact your business? Learn more about the tools needed to protect your client data and improve employee productivity.
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For businesses with 15–150 employees with small or no IT staff.
For businesses with 150–5,000 employees who need to fill gaps or are looking for help.
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Check out the latest happenings in the world of IT from our Locknet® experts. In this issue, we highlight some topics your organization should be aware of to minimize risks. Specifically, mitigating insider threats to your security and the risks of hanging on to legacy data.
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Wire transfer fraud has emerged as a significant threat to individuals and businesses alike. This type of fraud is often facilitated by social engineering tactics that manipulate victims into divulging sensitive information or authorizing unauthorized transactions. Understanding the mechanics of wire transfer fraud and how social engineering enables wire transfer fraud is crucial for safeguarding your company’s finances.
Wire transfer fraud occurs when an attacker tricks a company into transferring funds to the wrong account under false pretenses. This method is particularly dangerous because bank wire transfers are instantaneous and irreversible once processed. As businesses increasingly rely on digital transactions, bank wire transfer fraud has become a widespread concern.
The typical sequence of events in a wire transfer fraud attack might look like this:
Once the wire transfer is completed, it’s almost impossible to recover the funds, making prevention a necessity for businesses.
Let’s dig a little deeper into how social engineering enables wire transfer fraud. Social engineering is the art of manipulating people into performing actions or divulging confidential information. Scammers often use social engineering techniques in conjunction with wire transfer fraud to create convincing scenarios that lead victims to act against their better judgment.
Here is a closer look at how they do it:
A common form of social engineering in wire transfer fraud is business email compromise (BEC), where attackers impersonate executives, vendors, or partners. By hacking or spoofing email addresses, they can convincingly pose as someone the target knows and trusts. For example, an email from what appears to be the CFO of a company might instruct a finance manager to urgently transfer funds to a "new vendor account."
These fraudulent emails are often difficult to detect because they are crafted with specific details about the business, its internal processes, and even personal information about employees. This makes the email impersonation more convincing and allows the attacker to bypass typical security measures.
A common tactic in social engineering is the creation of a sense of urgency. Attackers know that when people feel pressured or rushed, they are less likely to thoroughly verify details. A fraudster might send an email claiming that a large deal is about to fall through unless a wire transfer is processed immediately.
This pressure can cause employees to bypass normal procedures for verifying transactions or seeking second approvals. By the time anyone realizes something is wrong, the transfer has already been completed.
Social engineers often gather personal or organizational information to make their attacks more convincing. They may scrape publicly available data from social media or company websites or, in more sophisticated attacks, intercept internal communications through phishing or malware.
For example, an attacker might learn that a particular executive is traveling and unavailable for verification. Using this knowledge, they could send an email to the finance team, claiming to be that executive, and ask for a wire transfer to be made in their absence.
The consequences of falling victim to wire transfer fraud can be devastating:
While the threat of social engineering and wire transfer fraud is real, businesses can take several steps to protect themselves:
One of the most effective defenses is thorough training. Employees should be able to recognize phishing attempts, understand the risks of wire transfer fraud, and follow strict protocols for verifying requests. Encourage employees to report suspicious activities immediately.
Use MFA for all communications and financial transactions. This way, even if an email account is compromised, an additional verification step is required to process the wire transfer.
Establish a clear procedure for verifying wire transfer requests, especially those involving large sums or new vendor accounts. For example, always require verbal confirmation from the requester before proceeding.
Invest in advanced email filtering and monitoring tools to detect suspicious activity, such as email impersonation attempts or abnormal patterns in communication.
Restrict access to sensitive financial information and systems to only those employees who absolutely need it. This reduces the potential damage if an account is compromised.
Wire transfer fraud fueled by social engineering poses a serious threat to businesses today. However, understanding its mechanics allows organizations to proactively address cybersecurity and take steps toward prevention. By prioritizing education, implementing stringent verification protocols, leveraging technology effectively, and fostering open communication about suspicious activities, organizations can significantly reduce their vulnerability against these deceptive tactics—and ultimately protect their finances from becoming another statistic in this growing epidemic.
Our cybersecurity experts are always hard at work keeping our clients informed about the latest threats to their organizations. Contact us to learn more about our role as a managed security service provider and how we can improve your security posture.
Cybersecurity
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